Accounting is described as a comprehensive preparation of records of all financial transactions in a systematic way in a business. Since there are agencies that oversee activities such as auditing in a business as well as the entities required to collect tax, accounting may also include activities such as making summaries of the financial transaction reports, analysing them and making reports on all these transactions. Accounting is very crucial for all business and depending on the size of the organizations, accounts can be handled by accountants and bookkeepers for the small entities and a finance department with a number of employees for large companies. It is through the reports provided from the accounting sections that enables businesses to make informed decision. The roles carried out in the accounting section includes bookkeeping and tax preparation.
Financial transactions such as sales, purchases, receipts or payments that have been made to an individual or another organization that take place in a business need to be recorded by the bookkeepers at all times. There are various record books where a bookkeeper is required to record both the cash and credit transactions which includes the supplier’s ledger, daybook, customer’s ledger and the general ledger. An accountant is able to come up with reports on the financial situation of the business when the bookkeeper’s record have been done properly. The two common types of bookkeeping records include single-entry and double-entry bookkeeping system. It is only the expense and income accounts can be recorded in the journal for expenses and revenue single-entry bookkeeping method. It is important to have two entries for accounting in order to make records for the transactions and can occur in the liability, asset, expense, equity or the revenue accounts in the double-entry bookkeeping system.
Another duty in accounting is tax preparation where appropriate tax returns can be filed for the business to the responsible body every year. The tax preparers, certified public accountants, attorneys or even enrolled agents can be hired by the business to carry out the tax preparation process. Tax preparation through processes such as calculation of the total tax amount and filing the tax is crucial for a business which ensures that it is compliant to the laws of the region it operates.
Accounting persons need to possess certain qualities that indicate they are suitable to carry out their duties well. The individuals need to be professional and ethical in everything they do so that they are able to keep financial matters away from unauthorized persons. Verbal and written communication is essential which ensure that they can provide proper guidelines in all issues pertaining to finances. They also need to have proper customer relations more so those that interact with customers every now and then in the business such as when serving them and addressing issues.